Amman East Power: Helping Jordan prepare for growth

Solution: OPIC provided $70 million in financing to a partnership of Virginia-based AES Corporation and Mitsui & Company of Japan to construct and operate a 370-megawatt natural gas-fired combined cycle power plant 15 miles outside of Amman. Power from the new plant, the nation’s first independent power plant (“IPP”), continues to be purchased by the National Electric Power Company of Jordan.

Impact: The award-winning plant increased Jordan’s generating capacity by roughly 20 percent and its average cost of power generation by roughly 10 percent. The success of the plant helped Jordan take a significant step toward diversifying the feed stocks the nation used for power generation.

Responding to economic growth and headwinds
In 2005, Jordan found itself with a mixed blessing. Its stock market had been booming for consecutive years, and its economy­ -- especially construction, tourism, and real estate -- was thriving, helped along by an influx of refugees and capital stemming from the ongoing instability in Iraq. So promising was the nation’s trajectory that economic forecasters calculated that energy consumption would increase by 6 to 7 percent annually in the years ahead.

But headwinds were building. Jordan’s state-owned power system was almost totally dependent upon imported oil, the prices of which had climbed markedly. To keep up with the financial pressure its state-owned power company was facing, fees to customers had been raised three times in the previous three years. Jordan’s grid was thin on generation reserve capacity, and it relied on cross-border agreements with Egypt and Syria for standby help. Saudi Arabia had just announced that it would be ending a two-year grant of oil, which was a key feedstock of the electricity generated by Jordan’s national energy system.

OPIC’s financing helped support construction of the Amman East Power (AES) plant was a high-profile demonstration of the potential for energy sector liberalization in the region, and its legal and financial structure established a template for subsequent independent power projects in Jordan. Construction was completed $15 million under budget.

A model project
The plant won the International Safety Award from The British Safety Council and a Top 10 Power Plant Award for the Middle East and North Africa region from Power Magazine, as well as a Golden Hard Hat Award for completing construction on time with no time lost due to accidents.

More important, the plant increased Jordan’s generating capacity by roughly 20 percent and its average cost of power generation by roughly 10 percent. The success of the plant helped Jordan take a significant step toward diversifying the feed stocks the nation used for power generation.